Due diligence law: the right and far right unite to dismantle it in the European Parliament

The right and the far right joined forces in the European Parliament on Thursday to unpick a law on major corporations’ social and environmental “due diligence” — a bombshell in Brussels.

By 382 votes to 249, MEPs approved scaling back the text’s ambitions, limiting the number of companies covered, and removing some obligations. A weakened version of the text had been rejected by MEPs on October 22.

In a break with the traditional “pro-European” majority, an ad hoc alliance between the right (the EPP) and the far right sparked an outcry among the other groups.

The EPP “has torpedoed any moderate compromise,” lamented Social Democrat René Repasi. The vote serves as a warning to the pro-European camp, just as Parliament begins to tackle a series of measures to “simplify” business life.

The far right savoured a “great victory” on Thursday. “Another majority is possible” and “this is just the beginning”, declared the Patriots group, chaired by Jordan Bardella.

Adopted only eighteen months ago, this due diligence law is bearing the brunt of the European Union’s pro-business turn, buffeted by competition from China and tariffs in the US.

Its implementation had already been postponed by a year, from 2027 to 2028. But Brussels wants to go even further to lighten the administrative burden on companies across the continent.

Backed by penalties, the law adopted in 2024 required companies with over 1,000 employees to prevent and remedy human rights violations (child labour, forced labour, safety, etc.) and environmental damage throughout their value chains, including among their suppliers worldwide.

On Thursday, in line with the Member States, the European Parliament raised the thresholds for companies covered to more than 5,000 employees and over €1.5 billion in annual turnover.

Above all, MEPs scrapped the European civil liability regime, which served to harmonise companies’ obligations and their liability before the courts in the event of breaches.

Instead, parliamentarians opted to leave it to national legislation. They also abandoned the climate transition plans that companies were supposed to provide. A move that France, which has long boasted of having created the first national due diligence law, has pushed hard for since the beginning of the year, including through its president, Emmanuel Macron.

“Asphyxiation”

The law is now “completely empty”, laments centrist Pascal Canfin. This vote comes “during COP30” in Brazil and “represents a considerable setback for private-sector climate action”, he believes.

On the right, MEP François-Xavier Bellamy argues, by contrast, that this “simplification” will “save our businesses from regulatory asphyxiation”.

Following this vote, negotiations will begin with the Member States, with a view to the final adoption of the revised law.

“It is still possible to correct course”, says Jurei Yada of the E3G think tank, but the vote shows that “the far right is gaining influence” and that the pro-European majority is “crumbling”.

Environmental organisations, which had previously expressed concern about the future of the due diligence project, are also taking aim at the “industrial lobbies” opposed to this law.

The absence of European civil liability risks introducing “competition between the 27 Member States to see who has the most lax regime to try to attract companies”, warns Swann Bommier of the NGO Bloom.

In the name of fighting bureaucracy, German Chancellor Friedrich Merz and French President Emmanuel Macron had called for the law to be scrapped altogether.

But even if it is only slashed, the pill is hard to swallow for some of the parliamentarians who had celebrated its “historic” adoption in April 2024 after several years of tug-of-war within the European institutions themselves.

There was no shortage of superlatives at the time, including among Macronists, such as the current president of the centrist Renew group, Valérie Hayer.

However, the political balance has shifted in the chamber since the June 2024 elections, marked by the strengthening of the right and the breakthrough of the far right, which wants to roll back the Green Deal, the package of environmental measures adopted during the previous term.

FashionNetwork.com with AFP.